Commitment Matters Blog

If you are a professional in Contract & Commercial Management, committed to achieving the best possible outcomes from negotiations with all your trading relationships, then ‘Commitment Matters’ is the perfect source of regular articles and posts dedicated to helping you achieve that goal.

Marketing versus Procurement, Sales versus Procurement, the business versus Procurement … If you pay attention to the headlines coming from many Procurement trade bodies and associations, you would think that every day for the average Procurement Department is a battle.

Adding to this atmosphere of trench warfare, another favoured theme is the sense of ‘not being recognized’, which leads to the regular discussion of Procurement achieving power through ‘reaching the top table’.

Might these issues of power and warfare be because too many Procurement groups are confused and struggling to deliver true measurable value? And is that problem in part due to the training and direction they are being provided? For example, in many cases Procurement teams are still being told that the epitome of success is ‘savings’ and that negotiation is about compliance. Now, one leading Association that regularly applauds its members for achieving savings suggests that those who think this way are ‘dinosaurs’. Then there is training. Works like ‘The Art of War’ have been recommended reading for years- so what are the new sources of wisdom that support a more integrated and collaborative approach?

I find it disconcerting when any functional group sees itself being ‘in conflict’ with its external contacts, whether those contacts are in other business functions or in other organizations. How can this possibly prove productive? How can it ever lead to the value and innovation that business and government agencies seek from their supply relationships?

Procurement groups will always operate with measurements that differ from those in other groups. For example, Marketing is focused on brand image and generating new business, while Procurement is tasked with ensuring value for money. Differences such as these are designed to cause contention, but contention does not mean that there should be conflict. Indeed, in mature organizations it leads to constructive and creative dialogue which results in a balanced decision.

A growing number of Procurement groups are successfully expanding their role, vision and influence. They see suppliers as partners and the foundation for their success. Many of these have recognized the value they gain from being members of IACCM and part of an inclusive community that encourages collaboration, new thinking and objective analysis. They embrace the opportunities for constructive dialogue across business boundaries and functions, welcoming the opportunity to take increased responsibility for supply outcomes.

Does this mean you can always trust suppliers or other functional groups to do the right thing? Certainly not – and that’s why it’s important to maintain oversight. But there is a big difference between oversight and warfare. And there is also a big difference between achieving positive business outcomes and winning short-term victories through the use of power.